Shermag Inc. files its plan of arrangement



    SHERBROOKE, QC, Aug. 20 /CNW Telbec/ - Shermag Inc. (TSX:SMG) and its
subsidiaries (the "Company") announced that following Shermag's Board of
Directors' approval, it has filed today with the Québec Superior Court its
plan of arrangement (the "Plan") which will be sent to its creditors to obtain
approval at the meeting of creditors to be held on September 10, 2009,
pursuant to the Companies' Creditors Arrangement Act (the "CCAA").
    Pursuant to the transaction approved by the Québec Superior Court on
August 12 last, which is to take place no later than October 16, 2009, Le
Groupe Bermex Inc. will, following the approval of the Plan by the creditors
and the Court, invest the settlement amount of $1,250,000. The Plan is
available on the Monitor's Website (www.rsmrichter.com) as well as the
Monitor's report, which recommends that the creditors vote in favour of the
Plan.
    Shermag has been operating under the protection of the CCAA since May 5,
2008 and obtained from the Québec Superior Court an extension of the stay of
proceedings against Shermag and its subsidiaries to October 16, 2009. RSM
Richter Inc. is the proposed Court appointed Monitor for the CCAA proceedings.

    Profile

    Shermag Inc., headquartered in Sherbrooke, Québec, designs, produces,
markets and distributes high-quality residential furniture. Shermag presently
has 221 active employees and is a manufacturer and importer with its
manufacturing operations and global sourcing division.

    Disclaimer

    This news release contains forward-looking statements about the Company's
operations, objectives, strategies, financial situation and performance. These
statements are made based on assumptions and management's best estimates with
regard to future events. However, the business of the Company is subject to
risks and uncertainties that could cause actual results to differ from
expected results. Important factors that could cause such differences are
changes in pricing pressure being exerted by competitors, particularly
Asian-based companies, or significant movement in the Canadian/US dollar
exchange rate. This is not an exhaustive list. A broader evaluation of risk
factors that could affect future performance can be found in the Company's
Annual MD&A and Annual Information Form, filed with Canadian securities
regulatory authorities. Given these risks and uncertainties, investors should
not place undue reliance on forward-looking statements as a prediction of
actual results. The Company disclaims any intention or obligation to publicly
update or revise any forward-looking statements, whether as a result of new
information, future events or otherwise.




For further information:

For further information: Shermag Inc., (819) 566-1515

Organization Profile

SHERMAG INC.

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